The mass media is suggesting to our gullible electorate that nobody could possibly object to the EU’s Foreign Affairs Council’s* proposed embargo on oil imports from Iran, in retaliation for that country’s apparent nuclear ambitions. Surely, it could only make the world a safer place? However, apparently innocuous policies can sometimes have unforeseen consequences.
The proposed embargo is predicated on the assumption that Iran really does want to build nuclear weapons, as distinct from developing the capacity for constructing nuclear weapons. Countries cannot neatly be divided into those that are nuclear powers and those that are not. There is a third category of country that has a latent nuclear weapons potential. Mr. Peter Jenkins, Britain’s permanent representative on the International Atomic Energy Agency between 2001 and 2006, would place Iran into this category. Countries with a latent atomic weapons potential acquire influence thereby and influence can be a valuable substitute for power. Furthermore, it can be achieved at a fraction of the cost and risk of having nuclear weapons in reality.
However, European Union countries and institutions are not known for the subtlety of their understanding or their measured policies.
An immediate consequence of the embargo is that Iran will lose markets for its oil in EU member states. However, this does not mean that Iran would sell less oil. It is estimated that the oil that they would have sold to Europe would then be sold to Asia – particularly to India and China. However, those countries will use their new-found market strength to demand substantial discounts in the price of the oil that they buy from Iran. Its effect on Iran will be to reduce the revenue that it receives from its oil. In the meanwhile, European Union member states will be forced to pay higher prices for the oil that they purchase from elsewhere.
The lower price of Iranian oil will not only (or even primarily) benefit consumers in India and China. Car drivers are very much of a minority in both countries. It will reduce the costs of industry in each of those emerging economies, facilitating their competition with what is left of British and other European manufacturing.
Another possibility is that Iran would block the Strait of Hormuz and prevent oil being shipped from any of the Gulf states. About 20% of the world’s supply of oil is transported through this waterway. This would increase the price of oil dramatically worsening the recession from which we are all suffering.
Of course, the consequences could be graver still. Iran will, almost certainly, see Israel as the motivator for the embargo and might retaliate militarily against that country. Alternatively or additionally, Iran might attack American bases in Bahrain, Qatar and oil installations in other Gulf states. In either eventuality, the United States would retaliate militarily against Iran, dragging the client states of the United States and Israel into the conflict.
Policies that are said to make the world a safer place sometimes have remarkably unsafe consequences.
*An interesting detail of this proposed decision is that although the Foreign Affairs Council is officially a meeting of the Council of the European Union (containing representative of member states), which is headed by the Rotating Presidency (currently the Government of Denmark), the Foreign Affairs Council is presided over by the EU’s High Representative, Baroness Ashton, who is also a Vice President of the Commission. This seems to indicate that this move to implement an embargo has originated within the institutions of the European Union – the staff of the High Representative and perhaps the European External Action Service – and not from the member states.
It is yet further proof that the Rotating Presidency (the personification of member state power) has been relegated to being a mere bauble. It no longer presides over the European Council (the meeting of heads of government), which is presided over by the new President of that body, Herman van Rompuy and it no longer presides over the Foreign Affairs Council. It simply holds the presidency (in effect the speakership) of the Council’s legislative role.
Furthermore, the UK has lost its ability to trade with the world. That function is entirely controlled by the EU. Therefore, if sanctions are applied against a country, we must conform to the requirements of the EU Commission.
Finally, sanctions against Iran are hypocritical. Why are sanctions not applied to other countries, but China in particular, for its unacceptable activities in Tibet? China does not hold elections; Iran does hold elections.